Southern Company is to acquire AGL Resources in a $12billion deal, creating the second largest energy utility in the United States.
The new electric and natural gas utility will have nine million customers in nine states.
AGL Resources will become a new wholly owned subsidiary of Southern Co. in a transaction with an enterprise value of approximately $12billion, including a total equity value of approximately $8billion.
AGL Resources shareholders will receive $66 per share, a premium of 36%.
The combined business will include 11 regulated electric and natural gas distribution companies and have a generating capacity of approximately 46,000 megawatts.
AGL will maintain its headquarters in Atlanta, Georgia.
Both company boards have approved the transaction, which is scheduled to conclude in the second half of 2016.
Southern Co. chief executive Tom Fanning, said: “With AGL Resources’ experienced team operating premier natural gas utilities and their investments in several major infrastructure projects, this is a natural fit for both companies.
The deal still needs approval from AGL shareholders and some state utility and other regulatory commissions.